It’s a harsh certainty that a Bishops Stortford residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the Bishops Stortford property market.Once your lease nears 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher amount will be payable. The majority of flat owners in Bishops Stortford will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
Leasehold properties in Bishops Stortford with over one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Using our service will provide you enhanced control over the value of your Bishops Stortford leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of lengthy negotiations with the freeholder of her studio apartment in Bishops Stortford, Rosie commenced the lease extension process just as her lease was approaching the all-important eighty-year threshold. The legal work completed in September 2013. The landlord’s costs were negotiated to less than 650 GBP.
Mr and Mrs. V Ward bought a newly refurbished apartment in Bishops Stortford in October 2009. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparable premises in Bishops Stortford with 100 year plus lease were worth £183,600. The average amount of ground rent was £65 billed monthly. The lease terminated on 22 July 2082. Considering the 57 years unexpired we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 exclusive of expenses.
In 2009 we were approached by Dr Yasmin García who, having bought a ground floor flat in Bishops Stortford in July 1995. We are asked if we could shed any light on how much (roughly) premium could be for a ninety year lease extension. Comparative properties in Bishops Stortford with an extended lease were in the region of £245,000. The mid-range ground rent payable was £45 collected quarterly. The lease concluded in 2093. Given that there were 68 years left we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 plus fees.